All You Need To Know Going Into Trade On Oct. 4

Stocks in Asia were mixed at the open Friday as investors awaited the key monthly American employment report and subsequent comments due from Federal Reserve Chairman Jerome Powell.

Japanese shares edged lower, with the Topix index at risk of capping its biggest weekly decline since May. Equities in Australia edged up and South Korea opened flat. The Singapore-traded SGX Nifty, an early indicator of NSE Nifty 50 Index’s performance in India, rose 0.19 percent to 11,381 as of 6:50 a.m.

Short on time? Well, then listen to this podcast for a quick summary of All You Need To Know before the opening bell.

Here’s all that could influence equities today.

• The S&P 500 rose the most in a month after climbing back from a drop of more than 1 percent sparked by the weakest reading on the U.S. services sector in three years.
• Oil extended its longest losing streak in 10 months. Futures in New York settled lower for the eighth straight session on Thursday, and remained on track for the largest weekly loss since July.

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Indian ADRs

Stocks To Watch

• HDFC Q2 Update: Profit on sale of investments rose 83 percent on a yearly basis to Rs 1,632 crore. Profit included profit on sale of part stake of equity shares in Gruh Finance. Income from dividend at Rs 1,074 crore versus Rs 6 crore. Last year income from dividend was received in the first quarter.
• Sun Pharma Advanced Research: U.S. FDA designated company’s drug as an orphan treatment for neonatal seizures. U.S. FDA awarded designation to the treatment, which has generic name Phenobarbital, on Oct. 2.
• Tata Steel is weighing a sale of its stake in an e-commerce joint venture as India’s largest steel manufacturer looks to offload non-core assets to pare debt, Bloomberg reported quoting people familiar with the matter.
• Manpasand Beverages: Batliboi & Purohit have resigned from the post of the statutory auditor of the company with immediate effect. The firm said that it has resigned due to recent developments of ongoing litigation amongst board of directors and subsequent resignation of the directors along with the company secretary. The firm also stated in their resignation letter that their audit team members were not allowed to enter the Vadodara factory for conducting the statutory audit.
• Magma Fincorp said that it remains well-capitalised and has capital adequacy ratio of 24.4 percent. The company has liquidity cushion of Rs 1,800 crore as on Sept. 30, which is three times of all the debt repayments amounting to Rs 650 crore due till March 2020.
• Entertainment Network to hold 49 percent stake in Global Entertainment Network, a unit of Qatar’s Marhaba FM channel. Services to be offered under the brand name of “MirchiOne” in Qatar.
• Dhampur Sugar Mills launched country liquor at its distillery unit at Dhampur.
• UCO Bank: Board approved the proposal to issue equity shares worth Rs 2,130 crore to Government of India.
• National Fertilizers: Fertilisers sale for April-September (kharif season) up 25 percent on a yearly basis to 27 lakh million tonnes.
• New India Assurance: Signed deed for entering into the Inter Creditor Agreements for the company's exposure to the debt instruments of Reliance Home Finance and Dewan Housing Finance.
• Ujjivan Financial Services: Sundaram MF decreased its stake to 3.02 percent from 5.12 percent in the company.
• HDIL: EOW has arrested Rakesh and Sarang Wadhawan, to be produced before court on Oct. 4.
• Engineers India’s bid for the acquisition of Projects and Development India has not been accepted.
• Punjab & Sind Bank to link all new floating rate for personal, retail and MSMEs to the repo rate with effect from Oct. 1.

IPO Watch

• IRCTC IPO subscribed 112 times on final day.

Brokerage Radar

Goldman Sachs on Wipro

• Upgraded to ‘Neutral’ from ‘Sell’; hiked price target to Rs 226 from Rs 221.
• Weak organic growth fairly reflected in valuations.
• Expect Wipro to underperform peers due to weak execution, challenges in key verticals and lack of management focus due to restructuring of business arms.

Morgan Stanley on Zee Entertainment

• Maintained ‘Underweight’; cut price target to Rs 248 from Rs 370.
• Expect uncertainty to continue as promoter debt issue lingers.
• Competitive dynamics in the industry are changing.
• Investments in Zee5 and progress of monetisation will dictate the revenue growth and margins.

HSBC on Tata Motors

• Maintained ‘Hold’; cut price target to Rs 135 from Rs 160.
• Jaguar Land Rover’s decline in China seems to be bottoming out now, but recovery seems far-fetched as well.
• With most models facing demand issues, path to recovery could test investor patience.
• Maintain ‘Hold’ due to demand headwinds for both JLR and domestic business.

Kotak Securities on NTPC

• Maintained ‘Buy’ with a price target of Rs 160.
• NTPC commissions India’s first ultra-supercritical unit at Khargone.
• Tariffs likely to be higher on account of higher plant cost.
• Positive due to increase in regulated equity base, lower under-recovery and higher fuel cost reimbursements.

Axis Capital on DLF

• Maintained ‘Buy’ with a price target of Rs 237.
• Free cash flow to improve sharply due to the settlement of payables.
• Management expects DLF to receive dividends of Rs 500-600 crore per annum from DLF Cyber City Developers Ltd.
• Optimizing land bank coupled with positive free cash flow, will aid in making the development business debt free.

Axis Capital on Spandana Sphoorty

• Initiated ‘Buy’ with a price target of Rs 1,200.
• Tapping into under-served rural opportunity; market attractive due to under-penetration.
• Rural market provides better market opportunity with lower competition.
• High degree of client engagement and robust risk management.
• Lowest operating expense ratio among peers.

Trading Tweaks

• Dewan Housing Finance Corporation, Refex Industries, Unitech to move into ASM Framework
• Gyscoal Alloys, KSK Energy Ventures, MIRC Electronics to move into short term ASM Framework
• IIFL Wealth Management price band revised to 20 percent.

Insider Trading

• Maharashtra Seamless promoter group Sudha Apparels acquired 1 lakh shares on Sept. 30.
• Aarti Industries promoters sold 25,000 shares on Sept. 30.

Money Market Update

• The rupee closed at 70.88/$ versus 71.08/$ on Tuesday.

F&O Cues

Futures

• Nifty October futures closed at 11,361.8, premium of 47.8 points versus 69.9 points.
• Nifty October futures up 2 percent, adds 3.5 lakh shares in open interest.
• Nifty Bank futures closed at 28,570.8, premium of 156.8 points versus 149 points.
• Nifty Bank Oct futures open interest up 5 percent, adds 73,000 shares in open interest.

Options

• Nifty PCR at 1.17 versus 0.96 (across all series)

Nifty Monthly Expiry: Oct. 10

• Maximum open interest on call side at 11,500 (13 lakh shares)
• Maximum open interest on put side at 11,200 (8.7 lakh shares)
• Open interest addition seen at 11,400C (+9.4 lakh shares), 11,500C (8 lakh shares)

Nifty Monthly Expiry: Oct. 31

• Maximum open interest on call side at 12,000 (22.3 lakh shares)
• Maximum open interest on put side at 11,000 (22.1 lakh shares)